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WEAK POUND SET TO BOOST LONDON
TOURISM OVER NEXT TWO YEARS, SAYS PWC
London is set to see a boost in overseas
tourism as a result of the weaker pound
following last year’s EU referendum.
The latest European Cities Hotel
Forecast from accountancy firm PwC
forecast London would make a return
to growth in 2017 and 2018 with 3.3%
and 2.5% revenue per available room
(RevPAR) growth projected respectively
- taking RevPAR to £120 in 2017 and
£123 in 2018.
PwC expects growth in the first half
of 2017 to build on from the strong
sector performance at the end of 2016
driven by the fall in the pound and
a more resilient than expected UK
economic performance in 2016.
Occupancy remains high and is
expected to grow 0.9% to 82% in
2017, while average daily rate (ADR)
is set to increase 2.4% to £146.
Occupancy is expected to increase a
April 2017
further 0.5% in 2018 with ADR set to
increase 2% to £149.
However, PwC warned that above
the long-term average supply growth
as well as security and safety concerns
amongst travellers could provide some
downward pressure.
Meanwhile, its forecast for the UK
regions in 2017 and 2018 shows,
despite a slower start outside London in
2017, hoteliers will see RevPAR growth
of 3% to £54, driven almost exclusively
by an improving ADR to £71 - the
highest ever in nominal terms.
Occupancy is projected to remain
high at 76%, but growth is muted in
both 2017 (0.1%) and 2018 (0.2%).
PwC anticipated that RevPAR growth
will slow to 1.7% in 2018, supported
by a 1.5% ADR improvement, taking
rates to £72.
This year is expected to see 20,000
rooms added to the UK hotel supply
up from 16,000 in 2016. For the UK
regions, overall hotel capacity could
expand by 12,000 rooms in 2017,
meaning a 2.4% net rise - one of the
highest growth rates since 2008.
Liz Hall, head of hospitality and
leisure research at PwC, said: “The
effects of a weaker pound were finally
felt by hospitality businesses towards
the end of 2016 with inbound holiday
tourism soaring.
“Hotel RevPAR in London
increased by 14.3% year-on-year in
December which according to STR
Global data is the biggest year-on-
year RevPAR growth since the
2012 Olympics.”
PwC expects inbound holiday growth
to continue in 2017 with staycations
from UK residents providing a further
boost to hotel performance.
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